Budget 2017 - Tax & Rate Updates!

Corporate Tax Measures

The Chancellor announced that the Government is committed to continue to have the lowest corporate tax rate of the G20 major trading nations.  As already announced the corporation tax rate reduces to 19% from1 April 2017 and then to 17% from 1 April 2020.

The corporation tax rate for small and medium sized companies trading in Northern Ireland will be reduced so that such companies can compete with those in the Republic where the rate is 12.5%.

The Government is also keen to continue to encourage investment in research and development (R&D) and the Chancellor announced that the R&D tax credit claim procedure would be simplified.

Tax Free Childcare Scheme Starts 2017

The chancellor also announced that the new tax-free childcare scheme is due to start in 2017.

The scheme will provide up to £2,000 a year in childcare support for each child under 12 where the parents save in a special account. If they save £8,000 the government will top up the account with 20% to a total of £10,000 which can then be used to pay for childcare costs.

Business Rates Relief For Small Businesses

There has been much lobbying from the small business sector to reduce business rates. The Chancellor stated that 600,000 small businesses currently benefit from small business rates relief.

He also announced that no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than they did in 2016/17.

In order to support the licenced trade from April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount for one year.

Advisory Fuel Rate For Company Cars

These are the suggested reimbursement rates for employees' private mileage using their company car from 1 March 2017.

Engine Size	Petrol	Diesel	LPG
1400cc or less	11p		7p
1600cc or less		9p
1401cc to 2000cc	14p		9p
1601 to 2000cc		11p
Over 2000cc	22p (21p)	13p	14p (13p)

Where there has been a change, the previous rate is shown in brackets.

You can continue to use the previous rates for up to 1 month from the date the new rates apply.

New Vat Limits

As mentioned earlier, the VAT registration limit increases by £2,000 to £85,000 from 1 April 2017. At the same time the de-registration limit increases to £83,000.

Contact us if you need more information or business help:
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Delay The Start Of Digital Reporting!

Changing Your Accounting Date Can Also Delay The Start Of Digital Reporting.

Another way of delaying the start of Making Tax Digital (MTD) would be to change the year end of your business. The legislation in the latest Finance Bill specifies that MTD will apply to accounting periods commencing on or after 6 April 2018.

This means that if you currently prepare accounts to 30 April then the first quarterly update to be submitted to HMRC will be for the period to 31 July 2018. However, if you changed the accounting date of your business to 31 March then the first quarterly update would be for the period from 1 April to 30 June 2019.

Contact us to discuss the full tax implications of such an action.

APJ Accountancy

☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Attack On Self-Employed In Budget 2017!

In his first Budget on 8th March, the new Chancellor Phillip Hammond announced that he would  level the playing field between employees and the self-employed by increasing Class 4 National Insurance Contributions (NICs) from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019. His justification is that the self-employed are now entitled to more generous state benefits than in the past and thus NIC rate should be increased towards the 12% Class 1 NIC employee rate.
Note that the flat rate Class 2 NIC contributions, currently £2.80 a week, cease on 5 April 2018.

The chancellor stated that only the self-employed with profits in excess of £16,250 will pay more national insurance.

Tax Free Dividend Allowance To Be Reduced To £2,000

The Chancellor also announced measures to limit the rise in tax-driven incorporation. The £5,000 tax free dividend allowance introduced by George Osborne will be reduced to just £2,000 from 6 April 2018. Mr Hammond claimed that many smaller owner-managed businesses have incorporated as limited companies mainly for tax reasons. Typically the director/shareholders of such businesses have paid themselves in dividends and paid less tax than similar unincorporated businesses.

Currently, once the dividend allowance has been used the remaining dividends are taxed at 7.5%, 32.5% and then 38.1% depending upon whether the dividends fall into the basic rate band, higher rate band or the additional rate. There are rumours that these dividend rates may also be increased in future years.

Although the cut in the tax-free dividend allowance is clearly aimed at owner managed companies, it will also impact on those with substantial share portfolios. Mr Hammond reminded us in his speech that the annual ISA investment limit increases to £20,000 from 6 April 2017 and that dividends on shares held within an ISA continue to be tax free.

Start Of Digital Reporting Delayed For Smaller Businesses

The Government is committed to the "Making Tax Digital" (MTD) project which is scheduled to start in April 2018 with the first quarterly updates being submitted by the self-employed and property landlords in July 2018.

Many business owners, professional advisors and the Treasury select committee had

expressed concerns about the timescale for the introduction of MTD. The Chancellor announced that there will be a one year deferral in the start date to 2019 for self-employed businesses and property landlords with gross income below the VAT registration limit.

Contact us if you need more information or business help:
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Are You Ready for the New EU Data Protection Laws?

Data Protection Laws Are Changing! The General Data Protection Regulation (GDPR) comes into effect on the 25 May 2018. It’s a single set of rules that is designed to protect the personal data of individuals in their private, professional or public life. The regulation will change the way your business can collect, use and transfer personal data. You will need to know where data is stored and you may even need to change the way data is collected and how you respond to requests about personal data you hold. For SME’S this means you will need to take some steps to demonstrate you’ve taken the GDPR seriously as there are significant sanctions and penalties for non- compliance, including fines of up to 4% of a business’s turnover. What do you need to do now to make sure you are compliant? A good start would be to look at your current approach to managing customer data and what and where it is held and document this. Then: Appoint someone in your business as the lead contact to manage the GDPR; Identify any areas where customer data is not adequately protected or managed; Review back up, disaster recovery and archiving processes for weaknesses; Make sure everyone in the business knows about the new rules and your procedures; Protect data on mobile devices in the same way as you would do in the business, and use encryption to prevent data if the device is lost or stolen; Ensure everyone knows their responsibilities to protect personal data; and Document and regularly review your new procedures. The new regulations apply to all businesses that hold personal data whatever the size. If you would like to know more and get a copy of our GDPR checklist for SME’s then please contact us.

Digital Tax is Coming!

Her Majesty’s Revenue and Customs (HMRC) has issued plans to make businesses file quarterly information with them. How individuals and businesses interact with HMRC is changing.

Keeping your financial records will become increasingly digital and most businesses, the self-employed and landlords will need to use software or apps to keep business records - the days of manual record keeping will be over!

There are exemptions, but for most businesses with turnover above £10,000 you will need to start planning for Digital Tax now.

So, what’s the good news?

We’ve teamed up with a major Cloud software company to provide our clients with the best possible fully compliant accounts package, and there are significant benefits to your business if you use our recommended package:

• It’s on the cloud so you can get a clear view of your finances any time any place;
• You will never need to do back- ups of your accounting software ever again;
• Run your business from work, home or on your mobile;
• It automatically grabs bank receipts and payments in real time;
• Use your mobile to photograph purchase invoices and expenses and upload these to the software; and
• Automatically generate and submit VAT returns and other reports with one click!

Just suppose you could see your results, who owes you money, who you owe and your business bank balance 24/7 from your smart phone!

Over the next few months we will be contacting all our clients to discuss the new HMRC rules and to demo how easy the new system is. In the mean- time, if you are “Good to go”, contact us and we will be delighted to help you comply with Digital tax and streamline take your business to a whole new level.

PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com